tv On the Money NBC November 2, 2014 5:00am-5:31am EST
the money i'm becky quick. the fed pulls the crutches away, the market locks and then runs but what will november bring and what could next week's elections and the jobs report mean. >> from cutting your credit card and cutting your cable cord. the future may be here now. how it will change your life and your money and how to make sure everything is coming up roses if your starting your own business. on the money starts right now. >> this is america's number one financial news program. on the money, now becky quick. >> here's a look at what's making news. as we head into a new week on the money. the federal reserve said to the economy you're on your own. and the feds open market committee halted it's bond buying program as expected. that program helped keep
interest rates low and stimulate the economy. later in the weekend in a surprise move the bank of japan announced it was increasing it's similar easing policy. that pushes global stocks higher by triple digits hitting an all time high on friday. stocks closed even higher on friday with the dow setting a record close. america's economy expanded a little faster than expected. the gross domestic product grew at an annual rate of 3.5% last quarter. better than analysts predicted. a busy earnings week, visa, mastercard, and facebook all beat estimates. twitter fell on weaker guidance. if you're in the market for a ferrari you can't get one cheap but you'll be able to buy stock in the company. fiat is spinning off 10% of the brand to make money for its expansion plan. the fed makes a historic move, the economy chugs along and narcotics all seem pretty happy right now.
is it really all sunshine and roses for your money? bob is joining us now. thank you for being here. >> thanks becky. >> we saw big moves this week. first of all the fed ending qe and the bank of japan with it's surprise move making room for more quantitative easing on its side of things. the markets loved all of this. what do you think? >> it's generally good news. we know that outside the u.s., japan in particular, europe not far behind they need some of the same medicine that the fed gave the u.s. and they're finally getting there. >> we talked to a lot of people during the week. one person at one point said look this is -- there's no alternative. the markets are the only place to be. is that your read of things too? >> well, the real economy is doing better in some places, most notably the u.s., take the gdp report this past week. investing in the real economy for growth is also working becky but the central banks want people to go out the risk curve. that's what the qe stuff is all
about. >> you mention this is the real economy too. if the fed put us off are we ready to really do a seemless handing off of the baton? >> it's a process and not an event. the fed is making the assessment that the u.s. economy is able to stand up on its own two feet by itself. that's an appropriate assessment. they'll contemplate when they start normalizing rates from the very low zeros. that does not mean they're not helpful. they still are because zero interest rates are very helpful. >> that gets us to the question when do interest rates actually rise. are you looking at the second quarter of next year? the third quarter? >> you know when the data permit, i do listen to janet. i think that's probably the second quarter of next year. i think we have to watch wage rates. i think we'll start to see as unemployment rate has fallen below 6% the beginning of some moderate wage increases. when i talk to ceos they're
short labor. skilled labor in particular. >> that's good. we wanted more inflation and more strength in the consumers hand. >> agreed. if we get some of that that's a missing ingredient for the fed to say okay time to raise rates. >> we have been watching a lot of differ things. a lot of numbers that come in. some of the consumer numbers are better than expected. gdp was stronger than expected because of the consumer. is that falling gas prices? >> falling gas prices. jobs. the last six or 8 months the jobs numbers have been good. we'll probably get another good one at the end of next week. consumers are feeling better about life. >> we have two good things. the job report and midterm elections. how important are those two? >> always important. the jobs number, if i could know nothing else, the unemployment claims and monthly bobs numbers would be it. the indicator of where the economy is. it's always important.
>> we're looking at the markets making a massive rebound from two weeks ago. forget about being down 10% are we looking at a real correction? we're back sitting at record levels once again. does that make you nervous or make you feel like things are where they should be? >> the part that makes me nervous is we hit the market over the head with a baseball bat. it takes time to heal and we had no time to heal. so straight up that makes me leery. i think we need to repair by going sidewise for awhile. consolidation can i use that phrase, as the fundamentals continue to improve slowly but surely. >> is that a recipe for what you expect to see the rest of this year. >> we're heading into a seasonally strong period, the end of the year as you know, and post midterm elections stock markets tend to do very well. actually for six months. we've not had a downed six month period in the post midterm elections since 1946.
>> this time if the republicans actually do win, that means probably gridlock in washington. is that a good thing? >> probably although we had gridlock now. if the republicans take the senate which the pun dandants a suggesting we'll have more between the congress and the president. he's not going to veto everything. he has two years left. he needs to think about legacy so i'm hoping that both the republicans in congress and the president learn how to spell the word compromise and get some stuff done. >> we can hope for that. sectors in the market that you like the most based on how everything is shifting? >> cyclicals to defenses and the mid cycle cyclicals would be industrials and technology leaving energy and materials that need pricing power for later on in the cycle and i still like health care within the defensive sectors. >> thank you for being here. >> great to be here. >> up next, is the future right now? how it feels like a page from
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sometimes it feels like the future is now. with headlines about driverless cars and walletless commerce you may think it's the news from the year 2050. so are consumer applications ready for you to actually use? joining us is a man covering personal technology for more than 20 years. i think even longer than that. walt it's a pleasure to have you here today. >> it's a pleasure to be with you becky every time. >> let's talk about this. it's been so confusing with all of the headlines about consumer experience, potential life style changes that are coming. you start thinking about things like mobile payments, driverless cars, cable tv alternatives, why don't we start with apple pay. when it first launched a few
weeks ago people looked at this as a bold new world. is this going to change the way that we pay for things? >> i think it is. you know, apple didn't invent this but their solution is so slick and so easy to use and it's built on top of the existing payment system that everyone is familiar with, the credit card system. here's what i ask people, when you're standing in line at the store, what's in your hand? your credit card or your phone? for the most part, it's your phone, yeah. so since it's already in your hand you just swipe it over the terminal, just hold it over the terminal and you're done. >> there was news this week about a couple of drugstore chains that said they were pushing back and disabling it. who has the upper hand? the retail operators that get to decide this or is it the consumer? >> i think it's going to be the
consumer eventually and i think companies that are trying to push a separate solution for other reasons that don't have much to do with consumer convenience won't be on the right side of history in the end. >> another trend is wearable technology. do you wear anything on your wrist to track what you're doing? >> i don't. and there's two reasons for that. one is i think everything that has come out so far has been not quite there. the other reason is i use the iphone and the phone itself has the basic functionality built right into it. we're coming out of the first inning. we have a tiny amount of adoption. we're about to go into an area where i think you will see people wearing smart watches, a larger number of people. not everybody. then i think we're going to see
wearables mean so much more. i think your clothing will in five or ten years just naturally come with sensors that will be flexible and won't show but will give you a whole bunch of data about your health and fitness. >> are you talking about shoes and sneakers? >> i'm talking about shirts. >> really? >> this may even exist today. things like bras that will have a heart rate monitor in them. >> i have enough going on in there already. i don't need any more. where do you come down on driverless cars? do you think the idea that we'll be zipping up and down the highway without paying in a tension, does that happen in the next 20 years? >> maybe in the next 20 years. i have ridden in one of the google driverless cars. it's a little strange as an
experience. but, you know, cars is a thing that involves safety and because it involves safety it involves regulation. it's not as simple as building a tech gadget and i think 20 years is a much more reasonable time frame for that. >> well, you've been covering this industry for an awfully long time. apple ceo tim cook publicly came out this week. he wasn't hiding anything before but he just hadn't come out and made a statement about it. now he's saying he wants to do this because he wants to make sure that he's helping other people if he can to make things easier. do you think this has impact on apple? on the world's most valuable company? >> well, first of all i salute tim cook for doing what he did and exactly the reason you said it. i think this is the last kind of civil rights fight we have. full recognition of quality for
gay and lesbian and transgender people so he's the head of as you say the most valuable company. i would also say the most influential company the last 15 or 20 years and he's being public about it. so it took guts and it was a great thing for him to do. >> thank you. i couldn't agree with you more. thank you for your time today. >> thanks becky. >> up next, we are on the money with the technology executive who was fired more than once and turns the set backs into a billion dollar success story. >> and more and more boomers
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pink slip and what can you do to replicate his success. thank you for being here. >> thank you for having me. >> it recently reached a valuation of $1 billion. that's amazing. why don't you describe what it is and why do you think it's so successful? >> so the basic idea is that advertise as good the life blood of the internet. so many of the biggest internet properties are funded by advertising so making content more valuable makes the internet a better place. so what i invented about ten years ago was the ability to have an auction for every ad. so in a blink of an eye before the website actually loads we auction the ad off to the highest bidder across hundreds of thousands or millions of advertisers. it helps get a more relevant ad on the theory that whoever pays the most will be the most
interesting for the consumer. >> you got there through an unusual route. your first start up, you got fired there. what happened? >> as an entrepreneur, are they foreign or are they made and in my case i've had had this belief that we could do incredible things and sometimes that ambition clashes with the reality of the people i worked for. i have been fired a few times and every time the same reason. i saw this incredible opportunity to change the world and the people i work for said that's not realistic and if i said no we have to it would lead to conflict and eventually i would get fired but i feel like i have to live every day at work as if it could be my last. i have to just to be successful. take the risks that allow us to potentially fail. >> how do you implemented all of the lessons that you learned?
>> so i have a team. the management team and people i have worked with for more than a decade are folks that know they can walk up to me and say brian i disagree with you or i think you're making a terrible mistake and it's hard to hear, especially when the company is doing well but i feel like that makes me a better leader is the people around me that give me the constructive criticism every day. when i lived through the dot com times and people were doing well and it went away and we have to treat every day as an opportunity to create more success and not to sort of say i'm a success. everyone should tell me how great i am all the time because thn how could i fail? >> that's a great way of looking at it. you mention that you live through the bus last time around. do you think it's different today? do you think these companies are doing things differently? is money as easy? is there a risk of a bubble bursting or is this time really different? >> i think that the internet is
far more mature this time around than last time. 15 years later we actually have huge amounts of commerce being done online. you have alibaba in china with hundreds of billions of dollars of e-commerce and amazon and ebay here. the internet economy is real this time. with that said invekt your expectations and realities and the challenges of building a company make it a risk that we get caught up on our own hype. i don't think it's going to be the same 10 years a head of its time bust that we saw in 2001. >> does that mean that we should be expecting that you go straight to an ipo? >> i think being public would be great in a lot of ways. there's overhead and challenges of being public but if it's what it takes for me to achieve my vision for the company and really changing the internet then, you know, we'll do it and maybe i'll get fired. >> it's been a pleasure meeting you. thank you so much. >> thank you for having me. >> launching a business is something that's on the mind of
a lot of people these days, especially boomers as they get ready to retire or are layed off more and more are feeling the entrepreneurial spirit. research shows that those that are 55 or older have the highest rate of entrepreneurship in america and are twice as likely to be successful as those in it's 20 or 30s. it's personally has its challenges. >> sharon epperson is here and joins us with more on what they need to do before getting started. why are so many baby boomers getting into entrepreneurship? >> because they want to keep working or they need to keep working and they have a wealth of experience, resources and expertise to bring to the table. >> yeah, there has to be some pitfalls. what are the challenges you would warn people about. >> even though they may have managed big departments and run businesses within a corporation, running your own business is far different. you need to have a plan. a well thought out business plan. it needs to include the income statement and cash flow
analysis. you need to have a well thought out plan that includes your target audience and how you're going to market all of these things and the small business association is really good about giving you tools that can help you get there. >> what are some of the first steps if you're thinking about jumping in on this? what's the first things you should consider and what are the first things you should do? >> figure up your start up costs. do a break even analysis. how much time is it going to take you to make money and have this business be profitable. there's some research that shows you might need $30,000 for this to happen. it could take 18 months or more for that to happen. and you also need to make sure one of the things that people really mess up on is money management and if you don't have a budget for your household it's going to be hard for you to figure that out for your business and you cannot mix them one. don't mix up your personal and business expenses. >> it's not surprising to hear that people in their 50s are more successful than people in their 20s and 30s.
that's experience and that pays off. >> the experience pays off. it also means that you may have more personal resources to put into this business but another thing you want to really think about is the money that you use and don't be so ready to tap that 401(k), to raid your 401(k) because it's going to take you longer to recoop those losses. as a boomer make sure that you look at a variety of funding sources and a lot of folks are k look at crowd funding now. you have to be social media savvy and look at new opportunities. those are considerations you want to make before jumping in. >> are there any statistics that tell you what your chances are? what your odds are of succeeding if you jump in on this or is it very dependent of who you are and where you are. >> there's many businesses that fail certainly. but the odds are in your favor if you set it up correctly and making sure you have a team. you likely had a team in corporate america. you want to have a team in this new venture as well and it
doesn't have to be super expensive but have three key components. a financial advisor, attorney and accountant. they can help you miss a lot of the pitfalls we talked about. a lot of the common mistakes. so make sure you find those people, the right people to help you with your plan. >> it's good advice. thank you. >> sure. >> up next on the money, a look at the news from the week ahead. as we go to the break, here's how the stock market ended the week.
>> for more on our show you can go to our website. and you can follow us on twitter at on the money. here's the stories coming up that may impact your money this week. another busy week of earnings especially for media companies. reports from disney, cbs, aol, time warner, news corp. and all alibaba. tuesday is the midterm election and we'll find out if the senate will go republican. wednesday the ism services indexes is out. that's the measure of the nonmanufacturing part of the economy. on friday it's the pig number of the week. the jobs report. that's the show for today. i'm becky quick. thank you for joining me. next week the start up culture in one of america's oldest
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nbc 10 news starts now. >> countdown to election day. decision 2014 heats up on this final weekend of campaigning. coming up, where you can see the candidates today. the rain may be gone, but the cold temperatures will be with us. here is a live look over center city where the wind will be kicking up as well. good morning, this is nbc 10 news today. i'm rosemary conners. it's 5:30 on this sunday. meteorologist michelle grossman is tracking the chilly conditions outside. we get the sun, but it's not going to do much to warm us up, right? >> that's right. with the wind, it's going to feel even colder.